Free-Market
Researchers Unveil Innovative Concept for Health Insurance
Reform
Juin ,1
2007
TOPEKA--While
the President and other national leaders continue their
call for a "patients' bill of rights," the Kansas Public
Policy Institute today releases its latest report on a health
insurance concept that would bring greater employee choice
and control without the need for legislation.
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"A
large-scale conversion of employer-sponsored health
plans to defined contribution formats is inevitable
. . . Employees will be placed in the "driver's seat"
for selecting their own health plans in an open market,
much as defined contribution has placed individuals
center stage in the 401(k) world." - Booz-Allen &
Hamilton
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The report,
entitled "The Real
Consumer Revolution in Healthcare: Defined-Contribution Health
Plans", describes the market and political forces that
are creating a groundswell of interest among employers to
find a new way of meeting their employees' healthcare needs.
The idea is to borrow from the success of defined-contribution
retirement plans and translate that approach to health insurance.
Co-authors
of the report are Gary Ahlquist, David Knott, and Phil Lathrop
from the firm of Booz-Allen & Hamilton, based in New York
and founded in 1914. Booz-Allen is a leading international
management and technology consultant focusing on business
strategy and transformation.
The
report notes the benefits of defined contribution health
care insurance--from portability between jobs, greater health
plan options, less administrative costs for employers, and
more employee say and control in their personal health insurance
plans. It explains dissatisfaction with managed care plans
-- at least when they are imposed by employers with little
employee control -- as a significant motivating factor for
this new approach.
Many
insurance marketers across the country are now designing
health insurance products based on the defined-contribution
model. The report discusses those developments, the rapidly
growing use of Internet information services to accommodate
employee choice, and the inertia that will be overcome as
this concept takes root around the U.S.
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Copies
of this report and other KPPI publications are available
upon request to the KPPI office.
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